Cost Cutting Tips to Help in Uncertain Economic Times

Are you worried about the economy? Wondering how it will affect your practice? Wondering what you can do to increase your revenues?

Managing a small business (and yes, a private practice IS a business no matter how small), is not an easy task during tough economic times. But, the good news is that there are ways to keep your practice profitable, even during downturns, even when your client billable hours are not increasing or even declining.

There are basically two ways to stay profitable: Increase revenues and/or cut costs. Here are some cost-cutting tips to help you deal with economic uncertainty:

Minimize staff and maximize talent. A friend’s consulting clients recently encountered hard times. She offered two nonessential employees an extended leave of absence (with a promise to call them back when the economy improves) and replaced them with an answering service. “Electronic Medical Records reduce the need for clerical staff by reducing staff workload and improving work processes.” (Tricia L. Erstad, MSN, RN, Journal of Healthcare Information Management, Vol. 17, No. 4). While layoffs aren’t pleasant, a company and its employees might not have a future without efforts to trim the budget. Job sharing is another option to across-the-board layoffs.

Cut back on or share advertising. Calculate your monthly advertising fees. You may find that you could save more by reducing the size of print ads. Try negotiating better rates with where you advertise.  Most companies would rather negotiate than lose your business. Keep the smaller ads effective, however, by adding red ink for emphasis or bolding critical text. Notice we say “cut back” but do not eliminate your advertising. This is the best time to advertise and pick up those clients that are out there looking for a therapist! If you don’t, your competition will. Do some joint advertising with colleagues who have a different specialty from yours and share the costs of the ads.

Learn new skills. Reclaim some of the tasks you currently pay someone to do. For example, one therapist used to pay someone more than $400 a month to burn CDs and training DVDs. He also paid a printer to collate and staple information packets. Paying an employee to collate and staple cut his production costs in half.

Purchase in bulk. Many companies overstock inventory in anticipation of a rush on product. Negotiate terms with your suppliers that allow you to purchase as needed with smaller minimums. That means you’ll pay less upfront. Check with a few colleagues and purchase office supplies jointly for a bigger discount.

Review your policies and implement other cost-saving measures. Review your worker’s compensation, vehicle and office building insurance policies. Some coverage may be redundant. Work with your insurance carrier to determine if policies can be grouped for a multiple policy discount.

Use your credit to your advantage. Credit card companies want solvency and on-time payment. If you have both, call the credit card company and negotiate a better rate, or take your business elsewhere. Credit card companies are settling for pennies on the dollar because of the large number of defaults and bankruptcies. Work your credit history to your advantage, and keep shopping until you find the best rate.

Know Your SCORE. SCORE, the service corps of retired executives is a great FREE federal program that matches successful, retired business executives with small businesses and offers advice and support. http://www.score.org/index.html

Attempts to cut costs can add up to thousands of dollars saved every year. Choose carefully, and you’ll be among the fittest survivors.

Find-a-Therapist.com offers a  complete suite of practice management tools including billing, electronic claims submission, online appointment scheduling, ability to accept credit cards and a private HIPAA compliant account for your clients where they can  track appointments, billing and balances.

Improve your cash flow, increase your administrative efficiency and enhance your patient satisfaction! Find-a-Therapist offers one stop shopping for your practice management and marketing needs.

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Advertising vs. PR vs. Marketing – What’s the Difference?

Studies show that 89 percent of everything you see and hear is forgotten after 72 hours — almost EVERYTHING!

To prove the point, how many ads can you remember that you heard this morning? Saw today? Probably not many… and you consider your advertising campaign a waste of money!

So, you want to design your own marketing campaign? Place your own ads? Not a bad way to save money, because you know your business better than anyone else. You are responsible for presenting a professional image of your company (at all times), and consistent coverage with various forms of media can certainly help you reinforce those positive thoughts.

Remember what advertising can do for you:

• build an image/credibility
• expose you or the marketplace
• get you potential customers via leads/responses/inquiries

Conversely, realize what advertising can’t do for you:

• give benefits where there aren’t any
• force people to contact you
• sell your product by itself
• it won’t guarantee your business — but it can get you noticed!

Advertising provides information about your company or service using different forms of media (such as print ads, radio spots, video or TV commercials, electronic postings, billboards, or other specific “types” of ads).

Marketing is the act of selling to specific, targeted groups via targeted advertising. Direct mail campaigns contain advertising material, but are known as a form of marketing.

Public relations involves building an image campaign and getting known in your field of work and your local community. True textbook definitions say that public relations cannot be controlled; if this is true, why are there so many “Public Relations Counselors” in the Yellow Pages?

Time and Money: The Two Biggies

“How much time should I spend on advertising/marketing?” There are no hard and fast rules, but you need to constantly look for new business while maintaining the old clients at the same time. Between 20 and 40 percent of your time is not uncommon, and it is recommended that a minimum of 10 percent of your total work hours be spent prospecting for clients. Budget for time invested as well as dollars; don’t forget to determine how much your time is worth, and include it in your overall cost of marketing and advertising.

“How much money should I spend?” This one varies, too, according to the type of business, the market, and the amount of sales. A range from 3 to 12 percent of gross receipts is a good figure for starters; you will know after a year or so if you need to increase or decrease your marketing budget.

Marketing is an investment strategy, similar to the poser of compounding. Your logo, which appears on your letterhead, business cards, and direct mail, coupled with your telemarketing and networking efforts, is one way to build your overall company image. You must plan and budget for your specific industry.

List your practice on Find-a-Therapist.com

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